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U.S. tax season returns, and with it refund fraud

Yahoo Tax - Wed, 2014-02-19 13:24
By Patrick Temple-West WASHINGTON (Reuters) - Kev Imandoust guards his U.S. Social Security number with 25-character passwords and email encryption software. But in 2012, the San Diego accountant became one of more than a million Americans whose identities were stolen to use for tax refund fraud. When he tried to file his taxes days before the April 15 deadline two years ago, Imandoust had his return rejected by the Internal Revenue Service. Someone in Florida had filed using his name and Social Security number, the IRS said. ...
Categories: Tax news

Wisconsin Legislators Reportedly Reach Tax Cut Deal

Tax Foundation - Wed, 2014-02-19 12:30

Last year, Wisconsin reduced each tax bracket slightly, collapsing them from five to four, retroactive to January 1, 2013:

Wisconsin Income Tax Rates Before and After 2013 Tax Changes

Single or Head of Household Taxpayer

Married Taxpayer

Prior Tax Rate

Current Tax Rate

>$0

>$0

4.60%

4.40%

>$10,750

>$14,330

6.15%

5.84%

>$21,490

>$28,650

6.50%

6.27%

>$161,180

>$214,910

6.75%

6.27%

>$236,600

>$315,460

7.75%

7.65%

Last month, Wisconsin officials reported that the state was expecting a budget surplus of about $1 billion. Governor Scott Walker (R) proposed a package of income and property tax cuts, which the Assembly passed. These include further reducing the 4.4% tax bracket to 4%, which would cut taxes for nearly all taxpayers (estimated total: $98 million), and by reducing a local college property tax and boosting state aid to colleges to cover it (estimated total: $406 million). The Senate (narrowly Republican-controlled) has been reluctant to approve the package, pointing to a projected structural budget deficit in future years.

The deal reached today appears to keep the income and property tax cut components, instead deleting a planned $113 million transfer to the rainy day fund. This seems a silly sticking point for senators: that money instead will sit in the bank as unobligated and be available for next year's budget, which can't be all that different from depositing it in the rainy day fund. On paper, however, it reduces next year's projected deficit from $807 million to $658 million. The deal also requires state agencies to return $38 million in unspent funds. (For context, Walker faced a $3.6 billion deficit when he assumed office, so much progress has been made on chopping that down.) Democrats, for their part, called for using the surplus to boost spending and warned about the long-term budget picture.

Using his own executive authority, Walker reduced Wisconsin's excessive tax withholding, which is presently designed to withhold 120 percent of projected tax liability. Taxpayers get the excess money back when they file their taxes, but it is essentially a forced-interest free loan to the state in the meantime. The money also sat on the state's books as a liability, worsening the paper deficit by some $323 million.

Categories: Tax news

IRS Reveals Dirty Dozen Scams For 2014 - Forbes

Google IRS Federal Income Tax - Wed, 2014-02-19 10:57

IRS Reveals Dirty Dozen Scams For 2014
Forbes
If you have concerns about an abusive tax preparer, you can report him or her to the IRS on using a federal form 14157, Complaint: Tax Return Preparer (downloads as a pdf). 6. Hiding Income Offshore. It is not illegal to have cash, brokerage accounts ...
7 steps to consider as you prepare your tax returnBoston.com
Taxpayers urged to take advantage of IRS Free FileBusiness Clarksville
IRS releases top tax scams for 2014WZZM
American Thinker (blog) -Mason City Globe Gazette
all 260 news articles »
Categories: Tax news

New TaxACT App, Tax Return Status, Tracks E-Filed Tax Returns, Federal ... - MarketWatch

Google IRS Federal Income Tax - Wed, 2014-02-19 08:59

New TaxACT App, Tax Return Status, Tracks E-Filed Tax Returns, Federal ...
MarketWatch
For the more than three out of four taxpayers who receive a federal refund each year, Tax Return Status provides an easy, fast and free way to monitor the status of their refund as it is processed by the IRS. After entering a few pieces of simple ...

and more »
Categories: Tax news

New York City Mayor Unveils Proposed Increase in Top Income Tax Rate

Tax Foundation - Wed, 2014-02-19 08:45

New York City Mayor Bill de Blasio this week unveiled (PDF) his FY 2015 budget proposal, which includes an increase in the top income tax rate to fund universal pre-K. The top city tax rate is currently 3.876 percent on income over $500,000; this would raise it to 4.41 percent for five years. The rate applies for singles, married joint filing, and head of households.

Current New York City Income Tax Rates, 2014

Single Brackets

Married Brackets

Head of Household Brackets

Tax Rate

>$0

>$0

>$0

2.907%

>$12,000

>$21,600

>$14,400

3.534%

>$25,000

>$45,000

>$30,000

3.591%

>$50,000

>$90,000

>$60,000

3.648%

>$500,000

>$500,000

>$500,000

3.876%

Source: New York Department of Taxation.

 

Proposed New York City Income Tax Rates, 2014

Single Brackets

Married Brackets

Head of Household Brackets

Tax Rate

>$0

>$0

>$0

2.907%

>$12,000

>$21,600

>$14,400

3.534%

>$25,000

>$45,000

>$30,000

3.591%

>$50,000

>$90,000

>$60,000

3.648%

>$500,000

>$500,000

>$500,000

4.410%

Source: New York Department of Taxation.

It is important to remember that these are on top of New York State income taxes. De Blasio’s proposal would result in a combined top income tax rate of 13.23 percent, just shy of California’s top rate of 13.3 percent.

 

Current Combined New York State & New York City Income Tax Rates, 2014

Single Brackets

Married Brackets

Head of Household Brackets

State Tax Rate

City Tax Rate

Combined Tax Rate

>$0

>$0

>$0

4.00%

2.907%

6.907%

>$8,300

>$16,700

>$12,550

4.50%

2.907%

7.407%

>$11,450

 

 

5.25%

2.907%

8.157%

>$12,000

>$21,600

>$14,400

4.50%

3.534%

8.034%

 

>$22,950

>$17,200

5.25%

3.534%

8.784%

>$13,350

>$27,150

>$20,350

5.90%

3.534%

9.434%

>$20,850

>$41,800

 

6.45%

3.534%

9.984%

>$25,000

>$45,000

>$30,000

5.90%

3.591%

9.491%

 

 

>$31,350

6.45%

3.591%

10.041%

>$50,000

>$90,000

>$60,000

6.45%

3.648%

10.098%

>$78,400

>$156,900

>$104,600

6.65%

3.648%

10.298%

>$209,250

>$313,850

>$261,550

6.85%

3.648%

10.498%

>$500,000

>$500,000

>$500,000

6.85%

3.876%

10.726%

>$1,046,350

>$2,092,800

>$1,569,550

8.82%

3.876%

12.696%

Source: Tax Foundation compilation.

 

Proposed Combined New York State & New York City Income Tax Rates, 2014

Single Brackets

Married Brackets

Head of Household Brackets

State Tax Rate

City Tax Rate

Combined Tax Rate

>$0

>$0

>$0

4.00%

2.907%

6.907%

>$8,300

>$16,700

>$12,550

4.50%

2.907%

7.407%

>$11,450

 

 

5.25%

2.907%

8.157%

>$12,000

>$21,600

>$14,400

4.50%

3.534%

8.034%

 

>$22,950

>$17,200

5.25%

3.534%

8.784%

>$13,350

>$27,150

>$20,350

5.90%

3.534%

9.434%

>$20,850

>$41,800

 

6.45%

3.534%

9.984%

>$25,000

>$45,000

>$30,000

5.90%

3.591%

9.491%

 

 

>$31,350

6.45%

3.591%

10.041%

>$50,000

>$90,000

>$60,000

6.45%

3.648%

10.098%

>$78,400

>$156,900

>$104,600

6.65%

3.648%

10.298%

>$209,250

>$313,850

>$261,550

6.85%

3.648%

10.498%

>$500,000

>$500,000

>$500,000

6.85%

4.410%

11.260%

>$1,046,350

>$2,092,800

>$1,569,550

8.82%

4.410%

13.230%

Source: Tax Foundation compilation.

De Blasio estimates the tax would raise $530 million per year, and notes that the top city income tax rate would still be lower than it was in the 1990s and mid-2000s. Nearly all the revenue -- $505 million of the $530 million – would come from individuals and businesses with over $1 million in annual income.

Categories: Tax news

IRS Reveals Dirty Dozen Scams For 2014

Yahoo Tax - Wed, 2014-02-19 05:57

The Internal Revenue Service has released its "Dirty Dozen" Tax Scam list for 2014 - just in time for tax season. Here's what to look out for...


Categories: Tax news

As discontent grows, Singapore budget to tighten noose on the rich

Yahoo Tax - Wed, 2014-02-19 01:20

By Brian Leonal SINGAPORE (Reuters) - Singapore is known as a tropical refuge for the world's wealthy, endowed with exclusive residential enclaves, a marina for super-yachts, two casinos and an annual Formula One race that brings in the global jet-set. But as the orderly city-state comes within a whisper of overtaking Switzerland as the world's largest offshore wealth hub, a growing public backlash is forcing the government to tone down its policies catering to the rich. The government's budget on Friday could raise levies on high-end cars and purchases of multiple properties, along with a possible widening of the top income-tax rate, say economists. It would build on measures announced last year that cooled Singapore's red-hot property market and targeted mostly rich homeowners.


Categories: Tax news

IRS starts accepting federal income tax returns - USA TODAY

Google IRS Federal Income Tax - Tue, 2014-02-18 22:26

IRS starts accepting federal income tax returns
USA TODAY
... report any content that violates the terms. IRS starts accepting federal income tax returns. You can begin filing your 2013 tax returns starting this Friday, January 31. Certified financial planner Paul Fain talks about the pros and cons of filing ...

Categories: Tax news

IRS advice: Earned Income Tax Credit gives workers a boost - Huntington Herald Dispatch

Google IRS Federal Income Tax - Tue, 2014-02-18 22:02

IRS advice: Earned Income Tax Credit gives workers a boost
Huntington Herald Dispatch
Workers who qualify for EITC must file a federal income tax return and specifically claim the credit to get it, even if they do not have a requirement to file a return. KNOW THE RULES. Before claiming EITC, you need to understand the rules to be sure ...

and more »
Categories: Tax news

British Columbia unveils LNG tax, sees budget surpluses

Yahoo Tax - Tue, 2014-02-18 17:01
By Julie Gordon and Jennifer Kwan VICTORIA, British Columbia (Reuters) - British Columbia on Tuesday provided long-awaited details on a new income tax for its nascent liquefied natural gas (LNG) industry, as Canada's westernmost province released its second consecutive balanced budget. The coastal province is eyeing a two-tier tax that would apply to income from the liquefaction of natural gas, the process of cooling gas into a liquid to be transported by ship, at facilities in British Columbia.
Categories: Tax news

U.S. tax season returns, and with it refund fraud

Yahoo Tax - Tue, 2014-02-18 15:07
By Patrick Temple-West WASHINGTON (Reuters) - Kev Imandoust guards his U.S. Social Security number with 25-character passwords and email encryption software. But in 2012, the San Diego accountant became one of more than a million Americans whose identities were stolen to use for tax refund fraud. When he tried to file his taxes days before the April 15 deadline two years ago, Imandoust had his return rejected by the Internal Revenue Service. Someone in Florida had filed using his name and Social Security number, the IRS said.
Categories: Tax news

General Electric Co seeks $658 million U.S. tax refund: court filing

Yahoo Tax - Tue, 2014-02-18 14:36

General Electric Co is suing the Internal Revenue Service for a $658 million tax refund related to a tax loss the company claimed as it exited the reinsurance market more than a decade ago. In a civil complaint filed on Friday in U.S. District Court for Connecticut, GE said the IRS wrongly disallowed a $2.2 billion loss it claimed from the 2003 sale of a reinsurance subsidiary. The complaint said GE, a large conglomerate that sells jet engines and financial products, is owed a $439.3 million federal income tax refund plus $219 million in interest. The IRS had disagreed with GE's claims for losses and reversed a tentative tax refund to the company in 2004, the court filing said.


Categories: Tax news

2014 Tax Season Filing Requirements for Seniors - Huffington Post

Google IRS Federal Income Tax - Tue, 2014-02-18 10:41

MSN Money

2014 Tax Season Filing Requirements for Seniors
Huffington Post
To get a detailed breakdown on federal filing requirements, along with information on taxable and nontaxable income, call the IRS at 800-829-3676 and ask them to mail you a free copy of the "Tax Guide for Seniors" (publication 554). In the meantime ...
Taxes That Lower Your IRS BillFox Business
Need more time to file your taxes?MSN Money
How To File A Tax ExtensionInvestopedia
Las Vegas Review-Journal -ABC News -STLtoday.com
all 252 news articles »
Categories: Tax news

Share of U.S. Corporate Income and Taxes by Size

Tax Foundation - Tue, 2014-02-18 09:00

In 2010, U.S. corporations paid about $223 billion in income taxes on slightly more than $1 trillion in taxable income. However, the vast majority of this income and taxes is attributable to the roughly 2,700 corporations with assets above $2.5 billion. Indeed, these corporations earned 77 percent of total corporate taxable income in 2010 and account for 69 percent of all corporate income taxes paid in the United States. Meanwhile, mid-size companies with assets between $500 million and $2.5 billion in assets earned 11 percent of corporate income and paid 14 percent of corporate income taxes.

For more charts like the one below, see the second edition of our chart book, Putting a Face on America's Tax Returns.

Categories: Tax news

IRS is America's feared and failing agency - Boston Globe

Google IRS Federal Income Tax - Mon, 2014-02-17 19:01

Boston Globe

IRS is America's feared and failing agency
Boston Globe
... on for months or years. But there is a bigger question about America's least-loved federal agency that barely gets asked: Is the IRS, which collects 90 percent of the nation's revenue, up to the basics of its job? Continue reading below .... “That ...

Categories: Tax news

Detroit bankruptcy bond fight a watershed for municipal market

Yahoo Tax - Mon, 2014-02-17 07:17
The city of Detroit's effort to declare some of its general obligation bonds as unsecured debt will be challenged in bankruptcy court Wednesday in what could be a precedent-setting turn in the largest-ever municipal bankruptcy in U.S. history. The issue in front of federal bankruptcy Judge Steven Rhodes is whether a pledge of Detroit tax revenue to pay off the voter-approved bond issues is a binding obligation under Michigan law, as argued by bond insurers in two lawsuits, or merely a promise. The outcome of the dispute could have a far-reaching impact on the $3.7 trillion municipal market, where general obligation bonds made up some 60 percent of the issues sold in the last decade. That could reduce investor interest in not only any future Detroit borrowings but in debt from other Michigan municipalities, forcing them to pay higher interest rates.
Categories: Tax news

IRS updates Pub. 17, "Your Federal Income Tax" - Business Management Daily

Google IRS Federal Income Tax - Sat, 2014-02-15 10:14

Florida Courier

IRS updates Pub. 17, "Your Federal Income Tax"
Business Management Daily
The IRS has produced an updated version of Publication 17, Your Federal Income Tax, its longstanding basic guide for individual taxpayers. Pub. 17 covers a multitude of tax issues ranging from simple filing status items to more complex tax matters.
Taxes That Lower Your IRS BillFox Business
HOW TO DO YOUR FEDERAL TAXES FOR FREEFlorida Courier
IRS reminds parents about eight tax-saving benefitsAnchorage Daily News
Stevenspointjournal -Investopedia -Military.com
all 38 news articles »
Categories: Tax news

IRS updates Pub. 17, "Your Federal Income Tax" - Business Management Daily

Google IRS Federal Income Tax - Sat, 2014-02-15 10:14

Boston Globe

IRS updates Pub. 17, "Your Federal Income Tax"
Business Management Daily
The IRS has produced an updated version of Publication 17, Your Federal Income Tax, its longstanding basic guide for individual taxpayers. Pub. 17 covers a multitude of tax issues ranging from simple filing status items to more complex tax matters.
IRS has income tax filing guidelines for seniorsLas Vegas Review-Journal
Taxes That Lower Your IRS BillFox Business
IRS is America's feared and failing agencyBoston Globe
Tax Law Home (blog) -Dailyrecord.com -Daily Herald
all 252 news articles »
Categories: Tax news

4 best sites for free online tax prep - MSN Money

Google IRS Federal Income Tax - Fri, 2014-02-14 13:11

MSN Money

4 best sites for free online tax prep
MSN Money
Millions of taxpayers qualify for an IRS program that allows them to file their taxes online using free software from major tax-prep companies. Here are the top four. By MSN Money staff Fri 3:55 ... Taxpayers who earned no more than $58,000 last year ...
HOW TO DO YOUR FEDERAL TAXES FOR FREEFlorida Courier

all 35 news articles »
Categories: Tax news

How Much More Redistribution is Needed to Make Every Family "Equal"?

Tax Foundation - Fri, 2014-02-14 07:00

Inequality persists in America despite the federal government redistributing more than $1.5 trillion per year from the top 40 percent of families to the bottom 60 percent. So how much more redistribution would be needed to make every American family equal?

That is the subject of my op-ed in today’s Wall Street Journal (found here). Our baseline for finding the answer can be found in two separate studies released in November 2013 by the Congressional Budget Office (here) and the Tax Foundation (here).

Both studies compared the amount of federal taxes we pay of all kinds (income taxes to excise taxes) to the amount of federal spending that we receive of all kinds (from welfare programs to national defense). From that simple family “fiscal accounting” we can then measure how much the federal government is redistributing from some Americans to other Americans.

The CBO study looked at prerecession 2006 data for non-elderly households. Not surprisingly, they found that households in the lowest fifth, or quintile, received more back from government than they paid in taxes—in fact, $9.62 for every $1 they paid in taxes. At the other end of the income spectrum it is also not surprising that households in the top quintile received 17 cents in government spending for every $1 they paid in taxes.

It is surprising, however, that CBO found that households in the middle quintile, the so-called middle-class, received $1.19 in federal spending for every $1 they paid in total taxes. What this means is that as a group, the bottom three quintiles—comprising 60 percent of the population—receive more back in government spending than they pay in taxes.

The Tax Foundation study analyzed postrecession 2012 data for all American families (as opposed to the CBO’s households) and determined that federal tax and spending policies redistributed more than $1.5 trillion that year from the top 40 percent of households to the bottom 60 percent. The study also found that state and local governments contributed another $500 billion worth of redistribution from the top to the bottom earners.

Yet, with all of this redistribution inequality persists.

So to figure out how much more redistribution would be needed to make every family equal, we start with the Tax Foundation’s estimate for the average “market income” for the 150 million American families in 2012, $81,600 (market income is a broader measure than AGI and includes some employee benefits, but not transfers).  

To figure out how much additional transfers we need to bring the market income of low-income families up to the national average, we need to add their current income to the net amount of government they are already receiving. For families in the bottom quintile, they have an average market income of $9,560 and receive $21,158 in federal spending. So this means they need an additional $50,882 in transfers to bring them up to the average market income.

At the other end of the income scale, in order to make high-income families “average,” we need to take even more of their income away beyond what government is already redistributing. As I outline in the WSJ piece, “Families in the top fifth have an average market income of $311,400 and pay $65,573 more in taxes than they receive in spending. Thus we need to take an additional $164,227 from them in higher taxes to lower their market incomes to the national average.”

When we reconcile these figures for the millions of families in each quintile, we would need to redistribute an additional $2.4 trillion in income from the top 40 percent of families to the bottom 60 percent in order to give every family an average market income.

This brings the total amount of redistribution to nearly $4 trillion—per year—to close the income gap.

The questions I ask readers who believe that more should be done to narrow the income gap are: “Where on that continuum should we aim, and what policies would achieve these goals without bringing the economy to its knees?”

******

If you are interested in reading more on government redistribution, I encourage you to read Gerald Prante’s White Paper, A Distributional Analysis of Fiscal Policies in the United States, 2000-2012 November 05, 2013   

Also, Tax Foundation economists first began conducting this fiscal accounting in 1967 with a landmark study showing how much households at various income levels received in government spending compared to how much they paid in taxes. We updated that research in 1981, 2007, 2009, and 2013. The most recent studies have also measured the amount of income redistributed from some groups of Americans to others.

We hope this research contributes to an honest debate over tax and spending policies in Washington.

2010

Video: Sally, redistribution, taxes and the deficit
- October 8, 2010

2009

How Much Does President Obama's Budget Redistribute Income? By Gerald Prante, Patrick Fleenor September 21, 2009

Accounting for What Families Pay in Taxes and What They Receive in Government Spending By Scott A. Hodge September 21, 2009

Basic Facts on Redistribution and the Impact of Obama's Policies By Scott A. Hodge September 21, 2009

2007

Generational Equity: Which Age Groups Pay More Tax, and Which Receive More Government Spending? By Gerald Prante, Andrew Chamberlain June 01, 2007

Who Pays America's Tax Burden, and Who Gets the Most Government Spending? By Scott A. Hodge, Gerald Prante, Andrew Chamberlain March 26, 2007

Who Pays Taxes and Who Receives Government Spending? An Analysis of Federal, State and Local Tax and Spending Distributions, 1991-2004 By Gerald Prante, Andrew Chamberlain March 22, 2007

1981

Allocating Tax Burdens and Government Benefits by Income Class, 1972-73 and 1977 By TF Staff February 01, 1981

1967

Allocating Tax Burdens and Government Benefits by Income Class By TF Staff January 01, 1967

Tax Burdens and Benefits of Government Expenditures By Income Class, 1961 and 1965 By TF Staff January 01, 1967

 

 

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